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Bell Canada enhances video play by acquiring CTV

Bell Canada's parent BCE (NYSE: BCE) is so bullish on its video prospects that it's plunking down $2.9 billion to buy up Canada's largest private broadcaster CTV.

Under the terms of the agreement, BCE will purchase the remaining 85 percent stake it does not already own in CT with $1.65 billion in debt.

What attracted BCE to acquire the remaining stake in CTV is the thirst for content. CTV not only owns the rights to the 2012 Olympics, but also the Discovery Channel, two pieces that BCE believes will help encourage growth of its Internet and wireless-based video services.

"The adoption of mobile TV is set to accelerate rapidly," said George Cope, CEO of BCE. "Video is going to be an integral part of Bell's product offering and key growth driver going forward... In fact, we generate more revenue from TV today than we do from our home phone access business."

Obviously, BCE's move here will tie in well with both Bell Canada and Bell Aliant's respective IPTV strategies.

Bell Canada has committed $2.9 billion to expand its Fiber to the Node (FTTN) 'Fibe' services, which includes its IPTV-based "Bell Entertainment Service" to over a million more homes this year. To date, Bell's IPTV service is available to about three million homes, primarily located in Toronto and Montreal. Thus far, 50,000 users are leveraging Bell's IPTV service, which is part of its Fibe Internet bundle. Meanwhile, Bell Aliant (TSX: BA.UN), which is also expanding its FTTN and FTTH network deployments, had about 45,000 IPTV users as of the end of this June.